October 27, 2022

7th Fiscal Period (Ended August 2022)
Financial Results Briefing Materials

AssetManagement
CompanyThis page intentionally left blank.

SANKEI REAL ESTATE Inc.

Table of Contents
Disclaimer
Executive Summary… P3

1. Financial Results andManagement Highlights… P4

2. Internal Growth… P13

2-1 Internal Growth Results… P14

2-2 Internal Growth Strategy… P17

3. External Growth… P21

4. Financial Strategy… P26

5. ESG Initiatives… P30

Appendix… P33

This document is intended for the purpose of providing information on
SANKEI REAL ESTATE Inc. (hereinafter, “SANKEI REAL ESTATE”), and is notintended for the purpose of soliciting investment in or recommending the
trading of specific products. Please consult your securities company for any
purchase of SANKEI REAL ESTATE investment units. When making any
investment, investors do so at their sole discretion and risk. The
information provided in this document is an analysis or a judgment madeby Sankei Building Asset Management Co., Ltd. (hereinafter, “Sankei
Building Asset Management”) based on information currently available toSankei Building Asset Management, and Sankei Building Asset Management
does not guarantee and is not liable whatsoever for the accuracy, reliability,
integrity, etc. thereof. In addition, the content may be changed orabolished without prior notice. The content of this document contains
earnings forecasts and other forward-looking statements. These forwardlooking statements are not a guarantee of future business performance or
financial content of SANKEI REAL ESTATE. All rights to any part of thisdocument belong to Sankei Building Asset Management, and no part of thisdocument shall be used, cited, reproduced, altered, disassembled,transmitted, etc. by any means, electronic or mechanical, for any purpose
without permission. This document is not a disclosure document based on
the Financial Instruments and Exchange Act. Please contact below if you
have any inquiries concerning this document.
Sankei Building Asset Management Co., Ltd.
Finance & IR Department
Phone: +81-3-5542-1316

2

SANKEI REAL ESTATE Inc.

Executive Summary
Financial Results and Management Highlights
 In the 7th FP, revenue and profit increased compared with the forecast and from the previous fiscal period
・Operating Revenue: +1.1% from the forecast, +9.0% from the previous fiscal period
・Operating Profit: +0.6% from the forecast, +5.8% from the previous fiscal period
 DPU* for the 7th FP increased to 3,158 yen (+38 yen from the forecast, +179 yen from the previous fiscal period) Lease agreements for 2 out of 7 floors of Shinagawa Seaside TS Tower have been executed
 “LUUP”, a share service for electric micromobility has been introduced at properties under management

Future Growth StrategiesExternal growth and internal growth that enable sustained growth of DPU






Promote sponsor commitment
Continue to implement diversified investment conscious of the portfolio matrix
Seek room for internal growth and reduce risk of tenants moving out
Implement measures to achieve stable DPU utilizing unrealized profit from the portfolio

Consider acquisition of additional units by the sponsor, The Sankei Building Co., Ltd.

Enhancement of sustainability promotion systemDisclosure of ESG benchmarks (improvement of disclosure) ⇒ Renewal of the website of SANKEI REAL ESTATE
Plans to support the TCFD (Task Force on Climate-related Financial Disclosures) recommendations*DPU refers to distribution per unit. The same applies below.

3

SANKEI REAL ESTATE Inc.

1. Financial Results and Management Highlights

4

SANKEI REAL ESTATE Inc.

Financial Results Highlights 7th Fiscal Period (Ended August 2022)
 Operating revenue increased in the 7th FP, +1.1% compared with the forecast and +9.0% from the previous fiscal
period Operating profit increased in the 7th FP, +0.6% compared with the forecast and +5.8% from the previous fiscal
period DPU* for the 7th FP increased by +38 yen from the forecast and +179 yen from the previous fiscal period■Financial Summary for 7th Fiscal Period (Ended August 2022)
Comparison with beginning-ofperiod forecast

Results

3,028 million yen
1,630 million yen
1,475 million yen
3,158 yen

Operating revenue
Operating profit
Net profit
DPU (distribution per unit)

+1.1%
+0.6%
+1.2%
+1.2%

+31 million yen+9 million yen+17 million yen+38 yen■Change in DPU for 7th Fiscal Period (Ended August 2022)
3,200 yen

3,120 yen

3,100 yen Distributions
in excess of
3,000 yen earnings
2,900 yen

3,158 yen

+9.0% +249 million yen+5.8% +89 million yen+6.0% +83 million yen+6.0%+179 yen(Unit: yen per unit)

2,979 yen
+1.2%

2,862 yen

+4.7%

20 yen2,800 yen

+4.1%

6th FP → 7th FP
Increase in DPU
2,979 yen → 3,158 yen+179 yen increase（+6.0%）

2,700 yen
2,600 yenComparison with previous
fiscal period

2,842 yen

2,500 yen～

2,400
0 yen～

5th FP Results

6th FP Results

7th FP Forecasts(As of April 2022)

7th FP Results

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SANKEI REAL ESTATE Inc.

Financial Results Highlights – Summary of DPU for the 7th FP (Ended August 2022)
 DPU for the 7th FP: 3,158 yen (+6.0% from the previous fiscal period) Increased from the previous fiscal period due to an increase in cancellation penalty received from tenants
despite a decrease in rental income■ Summary of DPU for the 7th FP (Ended August 2022)(yen per unit)

Comparison with previous
fiscal period+179 yen（+6.0%）

2,979

Fixed asset tax andcity planning tax for
4 properties acquired
in previous fiscal
period expensed

Change inrentalrevenue, etc.

Received
cancellation
penalties

Change in
expenses related
to leasing
business

Main breakdown
・Outsourcing
expenses+46
・Utilities expenses -48
・repair expenses -41

Change in otheroperatingexpenses

Change in nonoperating
income (loss)

Main breakdown・Asset management fee -118～～
6th FP Result

7th FP Result
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SANKEI REAL ESTATE Inc.

Detailed Financial Results Highlights(Comparison with Forecast) 7th Fiscal Period (Ended August 2022)
 Operating revenue (+1.1%) and operating profit (+0.6) both increased from the forecasts(Unit: million yen)Accounting period

7th FP Forecasts (A)(as of April 2022)

7th FP Results (B)(August 2022)

Operating revenue

2,996

3,028

31

2,515

2,516

1

Parking revenue

34

33

(0)

Utilities reimbursement

92

121

29

Rental and CAM revenue

Other revenue

Major Factors for the Difference

354

355

1

1,375

1,397

21

1,056

1,076

20

203

202

(0)

Utilities expenses

151

184

Repair expenses

67

55

Property taxes

301

303

Depreciation

308

309

1

Other expenses
Operating income (loss) fromleasing business

24

20

(3)

1,939

1,951

11

Total other operating expenses

319

320

1

Asset management fee

265

265

0

Operating expenses
Expenses related to leasing
business [Total]
Outsourcing expenses

Other expenses
Operating profit
Non-operating income
Non-operating expenses
Ordinary profit
Net profit
Distribution per unit (Unit: yen)
NOI

Difference(B)-(A)

Increase in utilities expenses compared with the assumed rate for Shinagawa (+16),
increases in cost of electricity, etc. (+16)
Shinagawa (-10) (to be carried forward to subsequent FP (-5), unexecuted (-5)), capital(12)
expenditure for BREEZÉ (-5), Hatchobori (+2), other
2
32

53

54

1

1,620

1,630

9

0

0

0

161

154

1,458

1,476

Increase in utilities expenses compared with the assumed rate due to Shinagawa’s partial
cancelation (+17), increase in electricity charges compared with the assumed rate due toother factors (+12)(7) Decrease in reserve funds used, including other borrowing-related expenses
17

1,457

1,475

17

3,120 yen

3,158 yen

38 yen

2,247

2,260

13

7

SANKEI REAL ESTATE Inc.

Detailed Financial Results Highlights(Comparison with Previous Fiscal Period) 7th Fiscal Period (Ended August 2022)
 Operating revenue (+9.0%) and operating profit (+5.8) both increased from the previous fiscal period(Unit: million yen)Accounting period

6th FP Results (A)(February 2022)

7th FP Results (B)(August 2022)

Operating revenue

2,778

3,028

249

2,615

2,516

(99) Shinagawa (-143), Toyo (+36), Omori (+5)

Rental and CAM revenue

Difference(B)-(A)

Major Factors for the Difference

Parking revenue

34

33

(0)

Utilities reimbursement

119

121

1

Other revenue

7

355

348

Operating expenses

1,237

1,397

159

972

1,076

104

Outsourcing expenses

224

202

(21) Leasing incentives from previous FP (-18) (Toyo (+14), Omori (-1)), Shinagawa BM (-3)

Utilities expenses

162

184

22

BREEZÉ (+8), Omori (+4), Hatchobori (+3), Toyo (+2), other

Repair expenses

36

55

19

Hatchobori (+7), BREEZÉ (+5), Toyo (+4), Akasaka (+4), Shinagawa (-3)

Property taxes

220

303

83

Expensing of fixed assets tax and city planning tax for properties acquired in previous
FP(+75), increase of FY22 fixed assets tax and city planning tax, etc. (+8)

Depreciation

306

309

2

Expenses related to leasing
business [Total]

Other expenses

22

20

(1)

Operating income (loss) fromleasing business

1,805

1,951

145

Total other operating expenses

265

320

55

Asset management fee

210

265

55

Other expenses

54

54

0

1,540

1,630

89

0

0

0

Operating profit
Non-operating income
Non-operating expenses

148

154

6

Ordinary profit

1,392

1,476

83

Net profit

1,391

1,475

83

2,979 yen

3,158 yen

179 yen

2,112

2,260

148

Distribution per unit (Unit: yen)
NOI

Shinagawa partial cancellation penalty (+347)

Increase due to properties acquired in previous FP

Increase in interest expenses, etc.

8

SANKEI REAL ESTATE Inc.

Management Highlights (External Growth)A-8

Status of Shinagawa Seaside TS Tower



Status of lease agreements
1) End of March 2022: Immediate cancellation of the lease agreement for 7 floors⇒ Received cancellation penalty [booked in the 7th FP (Ended August 2022)]
2) End of March 2023: Cancellation of the lease agreement for 14 floors



Restoration work
1) 7 floors: Received settlement of restoration work from the tenant⇒ will be included in the 8th FP (Ending February 2023)
2) 14 floors: Restoration work will be conducted at cost of the tenant and will bedelivered

Status of leasing activities: leasing meetings are held weekly
・ Selection of LM companies*/ Hold views for personnel at LM companies(February-March)・ Development of leasing measures/ Preparation of various tools (February-May)・ Direct approach by LM company and the sales team of sponsor building sales
team (Continued from April) / Viewing for leasing agencies (June)・ Introduction to prospective tenants (to August) 14 companies (total floor area
demanded: about 28,000 tsubos)



Status of leasing・ Current leasing agreement for 2 floors out of 7 floors has been executed.
(Lease will start from December 2022.)
・ Most inquiries received are from companies located in Kita-Shinagawa/HigashiShinagawa in Shinagawa Ward. Many of them consider multiple floors.

[Leasing Brochure]

VR viewing

Renovation to increase property value (renovation of common area)
Striving to improve comfort of office workers by renovating entrance halls, EVhalls, toilets (improvement of layouts), kitchenettes, etc.
[VR viewing tool]* “LM Companies” mean property leasing agencies that are engaged in leasing management activities. The same applies below.

9

SANKEI REAL ESTATE Inc.

Management Highlights (ESG-Related) Introduction of “LUUP”, a share service for electric micromobility
Sponsor (the Sankei Building Co., Ltd.) Press release (Excerpt) May 2022
Sankei Building Takes a Stake in Electric Micromobility Share
Service Start-up Luup■Services
Share services that allow people to movefreely from port to port using electric
micromobility devices installed across thetown. Using the dedicated app, the wholeprocess from use to payment can be easily
done. As a new infrastructure in town, thefirm provides last-mile mobility.

Introduced at・Toyo Park Building (15 units)
・Hatchobori Sankei Building (6 units)[Toyo Park Building]Honmachi Sankei Building

LEFOND PROGRÈS Chiyoda
Ochanomizu

SANKEI REAL ESTATE promotes introduction of “LUUP” to contributeto the realization of a carbon-neutral society, while striving to
improve convenience for tenants and increase property value.

 Renewed DBJ Green Building certification for 2 office buildings (September 2022)
A-3

S-GATE NIHONBASHIHONCHO* “DBJ Green Building certification” is a certification system established by Development Bank of Japan Inc. in April 2011
to support properties that give proper care to the environment and society (Green Buildings)

A-4

S-GATE AKIHABARA

10SANKEI REAL ESTATE Inc.

Earnings Forecast (Summary) DPU forecast for the 8th FP(ending February 2023): 2,239 yen, -29.1% (-919 yen) from the 7th FP
No change from the forecast published in April this year. The temporary factor in the previous FP (cancellation penalty frommain tenant) has been resolved
 DPU forecast for the 9th FP(ending August 2023): 2,377 yen, +6.2% (+138 yen) from the 8th FP
Based on the assumption that measures to achieve stable DPU utilizing unrealized profit from the portfolio is implemented
 Hotels (2 properties) that are sub assets have no risk of reduced revenue owing to contracts and sponsorship commitments(yen per unit)
・Temporary factor
Cancellation penalties
To be received from the 8th FP onwards

・Can be changed due to theinvestment management
situation of the entire portfolio,
including the leasing status of
Shinagawa Seaside TS Tower

433
Rentalrevenue

Rentalrevenue

Penalties andother revenue

・Penalties fromprevious FP-742
・Settlement of
restoration work 545

Expensesrelated toleasingbusiness

Other
sales
expenses

Nonoperating
income(loss)

Restoration
work andother revenue

Expensesrelated toleasingbusiness

Other
operatingexpenses

Nonoperating
income(loss)

Expected gain on
sales of realestate, etc.

・Restoration work expenses -544

7th FP
6th FPDPU Result DPU Result

・Settlement of restoration work -545

8th FPDPU Forecast

・ Restoration work expenses 544
・ Outsourcing expenses-269
・Utilities expenses-27
・Property taxes-24・Repair expenses-39
・Depreciation-18

9th FPDPU Forecast

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SANKEI REAL ESTATE Inc.

Forecast (Unabridged)
 DPU forecast for the 8th FP (ending February 2023): 2,239 yen, -29.1% (-919 yen) from the 7th FP
 DPU forecast for the 9th FP(ending August 2023): 2,377 yen, +6.2% (+138 yen) from the 8th FP(Unit: million yen)Accounting period
Operating revenue

7th FP Result (A)(August 2022)

8th FP Forecasts (B)(February 2023)

Difference(B)-(A)

9th FP Forecasts (C)(August 2023)

Difference(C)-(B)

Major Factors for the Difference

3,028

2,867

(160)

2,858

(8)

2,516

2,452

(64)

2,146

(306)

Parking revenue

33

32

(1)

31

(0)

Utilities reimbursement

121

119

(1)

102

(17)

Other revenue

355

263

(92)

8

(254)

・ Utilities revenue (-1) (Shinagawa (-10), other buildings (+8))

ｰ

ｰ

ｰ

570

570

・ Other revenue (-92) (Shinagawa cancellation penalty (-347), proceeds from monetary
settlement of restoration work (+254), other)

1,397

1,652

254

1,556

(95)

1,076

1,342

265

1,262

(79)

Outsourcing expenses

202

228

25

354

125

・ Outsourcing expenses (+25) (Shinagawa leasing incentives (+21), Shinagawa CM fee(+2), other)

Utilities expenses

184

154

(30)

167

12

・ Utilities expenses (-30) (Shinagawa (-23), BREEZÉ (-9), Omori (+2), other)

Repair expenses

55

333

278

97

(236)

Property taxes

303

301

(1)

312

11

Depreciation

309

298

(11)

307

8

Other expenses

Rental and CAM revenue

Gain on sales of real estate, etc.
Operating expenses
Expenses related to leasing
business [Total]

20

25

4

24

(0)

Operating income (loss) fromleasing

1,951

1,525

(425)

1,596

70

Total other operating expenses

320

310

(10)

294

(16)

Asset management fee

265

245

(20)

228

(17)

Other expenses
Operating profit

54

64

9

65

1

1,630

1,215

(414)

1,302

86

8th FP Forecasts (Comparison with 7th FP)
Operating revenue (-160 million yen)・ Rental revenue (-64), Cancellations (-71) (Shinagawa (-29), BREEZÉ (-28), Omori (-14))
Accrual of rent (+8) (Miyazakidai (+8)), other

Expenses related to leasing business (+265 million yen)・ Repair expenses (+278) (Shinagawa restoration, etc. (+273), BREEZÉ (+22), Toyo (-4),
Hatchobori (-4), other)・ Depreciation (-11) (end of depreciation period of facilities: Shinagawa (-5), Omori (-4),
Miyazakidai (-2))

9th FP Forecasts (Comparison with 8th FP)
Operating revenue (-8 million yen)・ Rental revenue (-306) Cancellations (-301) (Shinagawa (-284), Omori (-15), BREEZÉ (-2))
Accrual of rent, free rent expired, etc. (+7) (Hibiya (+4), Akihabara (+1),
Miyazakidai (+2))
・ Other revenue (-254) (Shinagawa proceeds from monetary settlement of restoration
work( -254), other)・ Expected Gain on sale of real estate, etc. (+570)

Non-operating income

0

0

(0)

0

0

Non-operating expenses

154

168

14

190

22

Ordinary profit

1,476

1,046

(429)

1,111

64

Net profit

1,475

1,045

(429)

1,110

64

・ Property taxes (+11) (FY23 fixed assets tax and city planning tax burden adjustment)

3,158 yen

2,239 yen(919 yen)

2,377 yen

138 yen・ Repair expenses (-236) (Shinagawa restoration, etc. (-270), BREEZÉ (+26), Toyo (+2),
Hatchobori (+2), other)

2,260

1,824

(436)

1,903

79

Distribution per unit (Unit: yen)
NOI

Expenses related to leasing business (-79 million yen)・ Outsourcing expenses (+125) (leasing expenses: Shinagawa (+113), Omori (+7), BREEZÉ(+2), other)・ Utilities expenses (+12) (BREEZÉ (+10), Hatchobori (+3), Hibiya (+3), Toyo (+2),
Shinagawa (-9), other))・ Depreciation (+8) (Shinagawa (+6), Hitachi (+1), other)

12

SANKEI REAL ESTATE Inc.

2. Internal Growth

13

SANKEI REAL ESTATE Inc.

2-1 Internal Growth Results– Rent Revision Performance of Office Buildings (Based on Financial Results) –■ Change in Occupancy Rate
100.0%

100.0%

100.0%

99.9%

100.0%
90.0%
0
80.0%

98.2%

99.1%

End of August 2021

End of February 2022

94.2%

～
～
End of August 2019

End of February 2020

End of August 2020

End of February 2021

End of August 2022

After the COVID-19 pandemic (March 2020)■ Change in Portfolio’s Actual NOI Yield and Office Buildings Average Rent Unit Price
Actual NOI yield (left axis)
Bar graph: Average unit price for
office building rent (right axis)

4.5%

4.0%

4.4%

4.3%

4.0%

19,309 yen

4.0%

17,992 yen

3.5%

(yen)
21,000

4.5%
4.2%

4.3%
20,00019,965 yen
19,00018,486 yen

18,00017,523 yen

17,022 yen

3.0%

17,131 yen
17,0002.5%

16,000
New acquisitionof 4 properties
September 2021

2.0%

15,000

～

0 ～
1.5%

FP endedAugust 2019

FP endedFebruary 2020

FP endedAugust 2020

FP endedFebruary 2021

FP endedAugust 2021

FP endedFebruary 2022

FP endedAugust 2022～
～14,0000

After the COVID-19 pandemic (March 2020)

14SANKEI REAL ESTATE Inc.

2-1 Internal Growth Results– Rent Revision Performance of Office Buildings (Based on Contracts Signed) –Refrain from negotiations that may increase the risk of tenants’ leaving considering the current office rental
market■ Rent Revision Performance of Office Buildings (Based on Rental Area)
Rate of rent increase (line graph)

Percentages of rent revision results (bar graph)
100%

27.1%

25.8%
Increase

18.5%

75%

68.5%
Increase

74.9%
Increase50%

No change
0.1% Decrease

FP endedAugust 20199 cases
369 tsubos

1.7%
No change

30%

65.8%
Increase

81.3%
No change

20%

5.2%

Rate ofincrease

10%

7.0%

73.0%
No change

31.4%

25.1%
No change

Number oftargeted tenants
Targeted leased
area

10.2%

98.3%
Increase

25%
0%

12.7%

35.1%
Increase

0.0%
Increase

57.3%
No change
7.6%
Decrease

1.2% Decrease

0.0%

34.1%
No change
0.1% Decrease

0%

18.7%
Decrease

FP endedFebruary 2020

FP endedAugust 2020

FP endedFebruary 2021

FP endedAugust 2021

FP endedFebruary 2022

FP ended
endedFP
AugustAugust 2022
2022

24 cases
3,144 tsubos

30 cases
4,165 tsubos

27 cases
2,769 tsubos

13 cases
1,195 tsubos

11 cases
1,725 tsubos

17 cases
705 tsubos-10%

After the COVID-19 pandemic (March 2020)■ Rent Revision Performance of Office Buildings (Based on Number of Cases)
By Contract Form
OverallFixed-term
Decrease
5 cases
29.4%

17 cases
70.6%

No change
12 cases

Decrease
4 cases
36.4%

11 cases
63.6%

By UseOfficeOrdinary

Decrease
1 case16.7%
No change
7 cases

6 cases88.3%

No change
5 cases

Decrease
3 cases27.3%

No change
8 cases

11 cases
72.7%

RetailDecrease
2 cases
33.3%

No change
4 cases

6 cases
66.7%

15

SANKEI REAL ESTATE Inc.

2-1 Internal Growth Results■ Examples of Lease-Up
A-11

Miyazakidai Garden OfficeCompleted lease-up
of one vacant portion
Occupancy rate

85.7% → Full occupancy (from July)■ Increase in Incidental Revenue Examples
A-10

S-GATE AKASAKA

Increased incidental revenue througheffective use of space or by changing
parking lot sublease agreements

Increased by 2.0%
based on monthly rent

■ Increase in Electricity Charges: Current Status and Countermeasures
１．Situation of rising electricity prices (currently supplied by five companies)
 No companies are at risk of failure in supply. However, accepting new contracts appears to have been halted.
 Prices are raised at the time of contract renewal and unit prices under the fuel cost adjustment system forexisting contracts are rising.

2. Countermeasures for increasing electricity charges
Working to obtain approval from tenants to pass the higher electricity prices to their bills (largely
approved) and raise prices for parts of buildings from which air-conditioning charges are collected
separately with the central air-conditioning system, thereby reducing the impact.
As a certain rise in electricity prices was factored in for the 7th FP (forecast),

utilities expenses for the 7th FP (actual) were below approx. 3 million yen versus the forecast.
For the earnings forecasts for the 8th FP (ending February 2023) and thereafter, the current situation is taken into account.
16

SANKEI REAL ESTATE Inc.

2-2 Internal Growth Strategy– Aiming to achieve stable medium- to long-term operations –■ Scheduled Renewal with Rent Revision/Renewal and Progress(Targeting Office Buildings)■ Assumed Occupancy Rate of Portfolio

Based on contracts signed (for lease agreements concluded between March 1, 2022, and August 31, 2022)
2023年2月期
EndingFebruary2023（第8期）(8th FP)

223 tsubos
Progress rate 7.9%

8th FP (ending February 2023)
・End of period 93.6%
・Period average 93.7%

2,820 tsubos(11.5%)

EndingAugust2023年8月期
2023（第9期）(9th FP)
0 tubos

10,590 tsubos(43.3%)
2,000 tubos

4,000 tubos

6,000 tubos

8,000 tubos 10,000 tubos 12,000 tubos

9th FP (ending August 2023)
・End of period 95.8%
・Period average 91.8%

契約更改・更新済面積
Contract
revision/renewal area
契約更改・更新予定面積（総賃貸面積に占める割合）
Contract
revision/renewal planned area (ratio to total leased area)■ Change in Rent Gap for Office Buildings
0%

September
2019

March
2020

September
2020

March
2021

-5%
-10%
-15%

September
2021

March
2022

September
2022

-4.4%

-2.9%

-2.6%

-8.5%
-12.0%-14.4%-15.9%-20%
After the COVID-19 pandemic (March 2020)

17

SANKEI REAL ESTATE Inc.

2-2 Internal Growth Strategy– Leasing policy for the properties of high priority –A-8

Shinagawa Seaside TS Tower■ Typical Floor Plan

■ Knowledge Gained Through Leasing Activities■ Future Leasing Policy

 The reasons of moving of prospective tenants are
as follows:
1) Consolidating floor area that had been
expanded in the current building2) Consolidation needs in multiple locations
3) Securing floor area which is now inefficient due
to expansion4) Improving the location
5) Upgrading6) Improving convenience(transportation, restaurants, etc.)

1. Expansion of target company (Area and tenant
attributes)
In progress- Identify the companies in the neighboring areas andapproach them
2. Optimize and accelerate leasing activities- Capture the needs of target companies (cost reduction,better location, etc.) and accordingly provide
In progress
recommendations.
- Send direct messages to the target companies andconduct telemarketing
3. Full deployment of salesforce for leasing- Utilize resources and network not only from LM
company, PM company and leasing agencies but also In progresslessor-side resources and network (AM companies/
sponsor building sales team)Starting in
4. Continuous approach to leasing agencies
September- Prepare open rooms for prospective tenants- Viewing for leasing agencies (second round)
Being- Notification of renovation to increase property value planned

 Most inquiries and introductions to prospective
tenants are based on relocation needs fromneighboring areas of the properties It is rare for large tenants to conduct drastic officerelocation when trying to restructure to reduce
costs at expense of the convenience of central
locations18

SANKEI REAL ESTATE Inc.

2-2 Internal Growth Strategy– Focusing on current challenges while aiming to reinforce the portfolio –Current View and Outlook for the Office Rental
Market Although vacancy rates remain high in small andmedium buildings, the rise seems to have halted overall Although there continues to be an increase inconsolidations and relocations, some examples provide
a sense of a return of demand for expansion and large
spaces With the exception of certain industries, corporate
performance is solid or recovering, but there is a strong
need to reduce fixed expenses in companies withdecreased ability to pay rents due to the deteriorationof macroeconomic conditions and the economy as wellas the prolonged impact of the COVID-19 pandemic
 Market rents will decline until there is a full recovery of
supply and demand Although telework has become established to a certain
degree, companies have deep-rooted office-centricneeds due to concerns about efficiency of operations,productivity and lack of communication
 COVID-19 has resulted in progress in work-style reform,
leading to diversification of office location demand andwork styles, as well as heightened preference for highly
functional buildings with good access

Due to the COVID-19 pandemic, the way people see
offices has changed and become diversified, and theoffice buildings that meet needs are in demand
In metropolitan areas, the uncertainty about market
conditions is increasing due to a large supply of officebuildings. Office buildings with no competitive
advantage may be obsolete

Portfolio of SANKEI REAL ESTATE Despite challenges of dispersed tenants, SANKEI REAL ESTATE holds a balanced
portfolio of office buildings that are centrally located *1, highly functioning*2 andenjoy close proximity to residential area*3
 Current issue: Lease-up of Shinagawa Seaside TS Tower
SANKEI REAL ESTATE considers vacancy as an opportunity for the further growth andpromote multi-tenants and renovation to increase value

Strategic leasing Despite the policy to reduce the risk of tenants moving, negotiations to be made forrent increase with tenants with a rent gap (especially tenants under fixed term lease) Diversify leasing periods, advance cancellation notices, switch the form of contracts(from ordinary lease to fixed lease) and diversify tenants

Reinforcement of portfolio
Portfolio Matrix Strategy
 Develop the policy to achieve stable DPU in the 8th FP (ending February 2023) and
implement it from the 9th FP (ending August 2023)
 In case the asset replacements are done, they need to meet the purpose of
improvement and maintenance of portfolio quality and stable portfolio profit*1 Tokyo Sankei Building, BREEZÉ TOWER, Hibiya Sankei Building, S-GATE AKASAKA, S-GATE NIHONBASHI-HONCHO, and Hatchobori Sankei Building are the applicable properties.
*2 Tokyo Sankei Building, BREEZÉ TOWER, Shinagawa Seaside TS Tower, and the S GATE Series (AKASAKA, NIHONBASI-HONCHO, and AKIHA BARA) and Hitachi Kyusyu Building are the applicable properties.
*3 Shinagawa Seaside TS Tower, Toyo Park Building, Omori Park Building, Hitachi Kyusyu Building, and Miyazakidai Garden Office are the applicable properties.

19

SANKEI REAL ESTATE Inc.

MEMO

20

SANKEI REAL ESTATE Inc.

3. External Growth21

SANKEI REAL ESTATE Inc.

Continue to implement diversified investment conscious of the portfolio matrix
Strong sponsor
supportDiversified investment bymaking maximum use ofstrong sourcing ability

Core investment centeredon developed properties■ Cap. Rate (Appraisal NOI Yield) x Area × Acquisition Price
Low

Central 3 wards of Tokyo

0 (Chiyoda, Chuo, and Minato
1 wards)
2.5%

3.0%

Cap. Rate

3.5%

4.0%

4.5%

S-GATE AKASAKA
Typical floor plate
158 tsubos
7 years old
1-minute walk(other than central 3 wards of2
Tokyo)

Area
GreaterTokyo

3 than Tokyo(other
23 wards)

Tokyo Sankei Building
Typical floor plate 536 tsubos
21 years old
1-minute walkHibiya Sankei Building
Typical floorplate
105 tsubos
30 years old
1-minute walk

S-GATE NIHONBASHIHONCHO
Hotel Intergate
Typical floorplateTokyo Kyobashi
186 tsubos
4 years old
3 years old
1-minute walk
4-minute walk
S-GATE AKIHABARA
Typical floorplate 74 tsubos
4 years old 5-minute walk

5.0%

5.5%

Tokyo 23 wards

Hatchobori Sankei Building
Typical floorplate 201 tsubos
56 years old
3-minute walk

Makes portfolio’s
profitability and stability
compatible

Osaka City
Nagoya4City

Office buildings
Shinagawa Seaside TS Tower
Typical floorplate 446 tsubos
19 years old
1-minute walk

Actual NOI yield*

Other ordinancedesignated cities
Core cities, major
regional cities 5
Major Regional Cities

Sub assets* The size of bubble represents
the acquisition price.

4.3%■ Investment Ratio byGeographic Area
Fukuoka
City

10.3%
Osaka
City

13.6%
Toyo Park Building
Typical floorplate
219 tsubos
31 years old
9-minute walk
Omori Park Building
Typical floorplate342 tsubos
29 years old
3-minute walkMiyazakidai
Garden Office
Typical floorplate 350 tsubos
29 years old
3-minute walk

Hiroshima City
4.1%

Greater
Tokyo
72.0%

Kawasaki City
2.9%
Tokyo 23 wards

Hitachi Kyusyu Building
Typical floorplate 322 tsubos
26 years old
17-minute walk
BREEZÉ TOWER
Typical floorplate
406 tsubos
14 years old
3-minute walk

69.1%

■ Investment Ratio by
Asset typeSub assets
13.4%

Hotel Intergate
Hiroshima
3 years old
3-minute walk
Office buildings
86.6%

High 6.0%* “Actual NOI yield” refers to the actual NOI yield calculated assuming the level of normal operations, after adjusting temporary factors suchas fixed asset taxes that were not expensed at the time of acquisition and one-off cancellation penalties.

22

SANKEI REAL ESTATE Inc.

Pipeline from Sponsor (1)■ Sub Asset Properties under Development
Logistics facilities

The second logistics facilities “SANKEILOGI”, “SANKEILOGI Atsugi” completed
Acquired “BELS” and “Nearly ZEB” evaluation

Started development of “Yatabe Logistics Facilities Project(tentative name)”
Construction is planned to be completed in March 2023

Introduced self-consumption solar power generation system and received 5 star, the highest rank
in “BELS”, the Building-Housing Energy-efficiency Labeling System, and “Nearly ZEB*1” certification■ Sponsor logistics facilities development project *Joint project
Property nameLocation

Construction completion

Lot area

Total floor area

SANKEILOGI Kashiwanoha

Kashiwanoha, Kashiwa-shi, Chiba

March 2022

5,313 m²

11,049 m²

SANKEILOGI Atsugi

Onna, Atsugi-shi, Kanagawa

August 2022

6,842 m²

14,055 m²

SANKEILOGI Settsu*
Yatabe Logistics Project(tentative name)Adachi Iriya Project(tentative name)Minamisuita Logistics Project(tentative name)*
Nagaokakyo Logistics Project(tentative name)*
Komaki-kita Logistics Project(tentative name)*
Fuchu Logistics Project(tentative name)*

Tsuruno, Settsu-shi, Osaka

September 2022

7,318 m²

14,778 m²

Yatabe, Tsukuba-shi, Ibaraki

March 2023 (planned)

Approx. 11,007 m²

Approx. 11,327 m²

Iriya, Adachi-ku, Tokyo

June 2023 (planned)

2,000 m²

5,714 m²

December 2023 (planned)

36,139 m²

86,422 m²*1*2

Minamisuita, Suita-shi, Osaka
Shikotaritenyaku, Nagaokakyo-shi, Kyoto

April 2024 (planned)

Approx. 7,428 m²

Approx. 15,249 m²

Fuso-cho, Niwa-gun, Aichi

April 2024 (planned)

Approx.36,824 m²

Approx. 43,706 m²

Musashidai, Fuchu-shi, Tokyo

Winter 2024 (planned)

Approx. 16,877 m²

Approx. 38,943 m²

Zeb stands for “Net Zero Energy Building” which means a building which aims for annual net energy consumption to be zero while maintaining comfortable indoor environment.
In BELS evaluation, properties are ranked by 4 categories: “ZEB”, “Nearly ZEB”, “ZEB ready” and “ZEB Oriented”.
The properties shown on this page are not properties owned or planned to be acquired by SANKEI REAL ESTATE as of the date of preparation of this material, and there is no
assurance that SANKEI REAL ESTATE will decide to acquire or be able to acquire these in future.
The incomplete buildings in the figure above are renderings prepared based on the assumption of the buildings being completed and may differ from the actual buildings.

Building structure/
number of floors
Steel Construction,
4 floors above ground
Steel Construction,
4 floors above ground
Steel Construction,
4 floors above ground
Steel Construction,
2 floors above ground
Steel Construction,
5 floors above ground
Steel Construction,
5 floors above ground
Steel Construction,
4 floors above ground
Steel Construction,
2 floors above ground
Steel Construction,
4 floors above ground23

SANKEI REAL ESTATE Inc.

Pipeline from Sponsor (2)■ Development of Office Buildings
Office buildings
Tenyamachi Office Project(tentative name)

S-GATE FIT Tenjinminami(tentative name)

Overview

Overview

Location

Tenyamachi, Hakata-ku,
Fukuoka

Location

Watanabedori, Chuo-ku,
Fukuoka

Construction
completion

February 2023 (planned)

Construction
completion

June 2023 (planned)

Lot area

831 m²Lot area

Approx. 893 m²

Total floor area

4,989 m²

Total floor area Approx. 4,813 m²

Structure/ size

Steel Construction,
10 floors above ground

Structure/ size

Steel Construction,
14 floors above ground■ Development of Sub Asset Properties
HotelsResidential

Caption by Hyatt Namba Osaka (tentative name)• The first branch of the new brand by Hyatt• The first partnership with Hyatt
Overview
Location

Nipponbashi, Chuo-ku,
Osaka-shi

Construction
completion

September 2023
(planned)

Lot area

Approx. 958.72 m²

LEFOND PROGRES, etc.
See below for the development plan

Sankei Building “LEFOND”
Official Instagram
account(@lefond.official)

Total floor area Approx. 5,748.75 m²

Structure/ size

Steel Construction,
11 floors above ground
Hotel Intergate Osaka Umeda

Hotel Intergate Kanazawa* The properties shown on this page are not properties owned or planned to be acquired by SANKEI REAL ESTATE as of the date of preparation of this material, and there is
no assurance that SANKEI REAL ESTATE will decide to acquire or be able to acquire these in future.
The incomplete buildings in the figure above are renderings prepared based on the assumption of the buildings being completed and may differ from the actual buildings.

24

SANKEI REAL ESTATE Inc.

MEMO

25

SANKEI REAL ESTATE Inc.

4. Financial Strategy

26

SANKEI REAL ESTATE Inc.

Financial Strategy – Financial Highlights (1) – Aiming to maintain a stable financial base by continuously striving to extend average remaining time to maturity
 Ratio of fixed interest rate is 100% (It was 88.2% before the refinance on September 5, 2022)
 Financial Highlights (as of September 5, 2022)
Balance of interestbearing liabilities

 LTV Ratio During Normal Operations

50.2 billion yen

LTV ratio

47.1%

Ratio of long-term
debt

80.9%

Ratio of fixed-rate
debt

100.0%

Average financing
interest rate

0.46%

Average remaining
time to maturity

3.0 years

LTV ratio■Distribution Map of Average Financing Interest Rates andAverage Remaining Time to Maturity of Office J-REITs(as of September 30, 2022)（%）

Average financing interest rate

1.0
0.9
0.8
0.7
0.6
0.5
0.4

SANKEI REALESTATE

0.3
0.2
2

3

4

5

6

7

End of the 7th FP End of the 8th FP End of the 9th FP
47.3%
47.6%
47.1%
(Forecast)(Forecast) Lender Composition (as of September 5, 2022)

Mizuho Bank

[Unit: million yen]
Borrowing
Percentage
amount12,50024.9%

Sumitomo Mitsui Banking

9,100

18.1%

Development Bank of Japan

7,700

15.3%

Mizuho Trust & Banking

4,640

9.2%

Sumitomo Mitsui Trust Bank

4,500

9.0%

Shinsei Bank

4,080

8.1%

Resona Bank

3,780

7.5%

Aozora Bank

2,000

4.0%

The Nishi-Nippon City Bank

1,000

2.0%

Kansai Mirai Bank

600

1.2%

Chiba Bank

300

0.6%

50,200100.0%

11 banks in total

Average remaining time to maturity (year)

27

SANKEI REAL ESTATE Inc.

Financial Strategy – Financial Highlights (2) – Gained more flexibility in financing with a line of credit (1.5 billion yen/uncommitted) (May 2022)
 Complied with SFDR (Sustainable Finance Disclosure Regulation)→ SFDR ARTICLE 8 Summary, etc. is disclosed on the Company’s website (June 2022)
 Promote the distribution and prolongation of the maturity ladder Maturity Ladder for Interest-Bearing Liabilities (as of September 5, 2022)
 Refinanced borrowings due in the 8th FP (September 5, 2022)
5.9 billion yen at fixed interest, 4.5 years (to be repaid in the 17th FP)
 Refinancing results for the 7th FP
5.6 billion yen at fixed interest, 6.0 years (to be repaid in the 19th FP)(Unit: million yen)

7,000
6,000
5,000
4,000
3,000

5,600

5,900

2,000

6,200

5,900
4,300

3,700

4,800

6,200

5,900

16th FP

17th FP

5,600

4,300

3,300

1,000
0
7th FP

8th FP

9th FP

10th FP

11th FP

12th FP

13th FP

14th FP

15th FP

18th FP

19th FPLong-term borrowings
28

SANKEI REAL ESTATE Inc.

MEMO

29

SANKEI REAL ESTATE Inc.

5. ESG Initiatives

30

SANKEI REAL ESTATE Inc.

ESG Initiatives (1)■ Topics

 Continued participation in 2022 GRESB Real Estate Assessment

The evaluation results are due to be published in a press release soon
GRESB Real Estate Assessment: A global investment benchmark established as a tool to measure the environmental, social,and governance (ESG) considerations of individual companies and funds in the real estate sector and used to selectinvestment targets and engage in dialogue with investment targets.

 Continued installation of LED lighting at tenant turnover・ 7th FP (ended August 2022): Installed at BREEZÉ TOWER
・ 8th FP (ending February 2023): Installation at Omori Park Building planned
A-9

A-2

BREEZÉ TOWER

Omori Park Building

Photo: Image of LED lighting (S-GATE AKASAKA)■ Future Initiatives

 Disclosure of ESG benchmarks (improvement of disclosure)⇒ Renewal of the website of SANKEI REAL ESTATE Plan to support the TCFD (Task Force on Climate-related Financial Disclosures) recommendations
31

SANKEI REAL ESTATE Inc.

ESG Initiatives (2)■ Various Rules Associated with ESG
Sustainability Policy(1) Preserving the Earth environment and reducing theenvironmental load of assets under management(2) Serving the local community(3) Cooperating with external stakeholders(4) Working with executives and employees(5) Observing compliance and establishing/maintaining aninternal control system(6) Disclosing ESG information and securing transparency

Sustainability Promotion System•••

Chief Sustainability Officer: Executive Deputy President
Sustainability Officer: General Manager, Sustainability
Promotion OfficeSustainability promotion meetings: Examining and planningvarious policies, targets, and measures related to sustainability

Sustainability Promotion System
•
Rules
•
Policy on energy conservation
Policy on greenhouse gas emissions
reduction
Policy on sustainable procurement••

Policy on saving water
EMS operational
manual■ Social

Energy consumption reduction targets

 Long-term target 1: Reduce annual energy consumption intensity within the scope
managed by the owner by 5% from the base year (2019) by 2025
 Long-term target 2: Reduce annual energy consumption intensity within the scope
managed by tenants by 1% from the base year (2019) by 2025

GHG emission reduction targets<Scope 1 + Scope 2>
 The single-year target is to reduce energy consumption intensity by 1% comparedwith the previous year for Scope 1 + Scope 2
 Reduce by 5% from the base year (2019) in the medium to long term (5 years)<Scope 3>
 Reduce by 1% from the base year (2019) in the medium to long term (5 years)

Status of environmental certificates
Evaluation
ranking

Year ofissuance

Tokyo Sankei Building

★★★★

2021

BREEZÉ TOWER

★★★★

2021

S-GATE NIHONBASHI-HONCHO

★★★★

2022

S-GATE AKIHABARA

★★★

2022

S-GATE AKASAKA

★★★

2020

Hotel Intergate Tokyo Kyobashi

★★★★

2021

★★

2021

Property nameAcquisition of
BELS evaluation••■ Environment

DBJ Green Building
Acquisition of certifications

Internal regulations, policies, etc.

Hotel Intergate Hiroshima Relationship with Stakeholders
 Response to the COVID-19 Pandemic[Example of Building Events]
Agri Marché in Otemachi
Joint project by Nippon Broadcasting System and YACYBAR
Program Marche was held at Tokyo Sankei Building■ Governance Sponsor Commitment
Promotion of Same-Boat Investment by Sponsor
Number of investment units
issued and outstanding

Number of units heldby sponsor

Percentage of units heldby sponsor

467,099 units

17,479 units

3.74%■ Contributions to SDGs (Sustainable Development Goals)
SANKEI REAL ESTATE’s efforts have contributed to the following SDGs.
Goal 3: Ensuring prevention of the spread of infectious diseases,
flexible work styles
Goal 7: LEDs, solar power, reduction of heat load
Goal 8: Rooftop terraces (worker-friendly buildings)
Goal 11: Green Building certification, seismic dampers, stockpiles
Goal 12: Appropriate treatment and recycling of industrial waste
Goal 13: Disaster countermeasures, intake of people having
difficulty returning home32

SANKEI REAL ESTATE Inc.

Appendix

33

SANKEI REAL ESTATE Inc.

Balance Sheet (Unabridged) for the Fiscal Period Ended August 2022 (7th FP)(Unit: thousand yen)
6th FP
7th FP(as of Feb. 28, 2022) (as of Aug. 31, 2022)

6th FP
7th FP(as of Feb. 28, 2022) (as of Aug. 31, 2022)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust , net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Deferred assets
Investment unit issuance expenses
Total deferred assets
Total assets

4,512,675
3,729,623
89,93861,458389,377
8,783,072

5,575,535
3,303,184
62,70271,80178
9,013,302

179,269(18,849)
160,419
544
(39)
504
2,457,766
18,708,509(1,291,738)
17,416,771
71,171(2,476)
68,695
11,302(1,131)
10,17029,876(7,822)
22,05477,433,848
32,673
97,602,903

181,978(22,182)
159,795
544
(53)
490
2,457,766
18,769,170(1,592,660)
17,176,510
71,171(3,517)67,654
11,302(1,698)
9,603
49,525(11,769)
37,756
77,433,848
56,722
97,400,148

3,893
3,893

2,953
2,953

93,33810
10,000103,348
97,710,146

103,157
15
10,000113,173
97,516,274

30,12430,124
106,523,343

24,09924,099106,553,676

Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Long-term borrowings due within 1 year
Accounts payable – otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term borrowings
Leasehold and guarantee deposits received
Leasehold and guarantee deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Unitholders’ capital deduction
Unitholders’ capital (net)
Surplus
Unappropriated retained earnings (undisposed loss)

Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

126,748
400,000
11,500,000
242,634
38,805815
485,392
11,356
12,805,752

244,965
9,600,000
308,770
44,831
926
171,838
447,828
6,036
10,825,198

38,700,000
87,974
4,102,499
42,890,473
55,696,225

40,600,000
88,2374,129,413
44,817,651
55,642,849

49,442,685(7,136)49,435,549

49,442,685(7,136)49,435,549

1,391,567
1,391,567
50,827,117
50,827,117
106,523,343

1,475,277
1,475,277
50,910,827
50,910,827
106,553,676

34

SANKEI REAL ESTATE Inc.

Statement of Income (Unabridged) for the Fiscal Period Ended August 2022 (7th FP)(Unit: thousand yen)

6th FP

7th FP(ended Feb. 2022)(ended Aug. 2022)

Operating revenue
Leasing business revenue
Other leasing business revenue

2,615,817

2,516,558

162,297

511,4932,778,114

3,028,051

Expenses related to leasing business

972,543

1,076,927

Asset management fee

210,809265,992

Asset custody fee

2,013

2,100

Administrative service fees

8,760

7,460

Remuneration for directors (and other officers)

3,600

3,600

Other operating expenses

40,09841,722

Total operating expenses

1,237,824

1,397,803

1,540,290

1,630,247

Interest income

37

41

Insurance claim income

253

-

-

279

Total operating revenue
Operating expenses

Operating profit
Non-operating income

Interest on refund
Other non-operating income

170Total non-operating income

308

321

Interest expenses

88,264

100,931

Borrowing related expenses

48,54047,460Investment unit issuance expenses

6,024

6,024

Other non-operating expenses

5,583

26

Total non-operating expenses

148,414

154,444

Ordinary profit

1,392,184

1,476,124

Net profit before income taxes

1,392,184

1,476,124

Income taxes – current

820

932

Income taxes – deferred

2

(5)

823

927

1,391,360

1,475,197

207

80

1,391,567

1,475,277

Non-operating expenses

Total income taxes
Net profit
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

35

SANKEI REAL ESTATE Inc.

Statement of Cash Flows for the Fiscal Period Ended August 2022 (7th FP)
6th FP(FP ended Feb. 2022)
Cash flows from operating activities
Net profit before income taxes
Depreciation
Investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable – other
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in long-term prepaid expenses
Increase (decrease) in consumption taxes payable
Decrease (increase) in other assets
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Proceeds from leasehold and guarantee deposits received
Refund of leasehold and guarantee deposits received
Proceeds from leasehold and guarantee deposits received in trust
Refund of leasehold and guarantee deposits received in trust
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term borrowings
Repayments of short-term borrowings
Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from issuance of investment units
Payments of investment unit issuance expenses
Distribution paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period(Unit: thousand yen)
7th FP(FP ended Aug. 2022)

1,392,184
307,9376,024(37)88,264(47,934)(389,377)(2,245)(86,226)
9,619
145,449(2,709)(49,613)(89,208)77
1,282,20437(77,396)(881)
1,203,964

1,476,124
310,7636,024(41)
100,931
27,164
389,377(10,343)
116,727
64,742(37,563)(5,319)(9,818)
171,838(78)
2,600,531
41(94,905)(821)
2,504,846(9,967)(25,743,595)
5,933
(98)
1,005,708(128,308)(24,870,328)(2,708)(102,914)
595(331)
110,219(83,190)(78,330)

1,000,000(600,000)
16,700,000(4,300,000)
12,901,784(29,661)(1,020,683)
24,651,439
985,075
7,257,223
8,242,298(400,000)
5,600,000(5,600,000)(1,390,093)(1,790,093)
636,421
8,242,298
8,878,719

36

SANKEI REAL ESTATE Inc.

LenderMizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
The Nishi-Nippon City Bank
Kansai Mirai Bank
Chiba Bank

Borrowing amount(million yen)
972
716
614
392
358
324
324
856
639
548
350
319
294
294
950
800
2,000
620
550
490
490
1,167
832
713
456
416
358
358
1,331
929
796
509
465
385
385
1,550
1,000
700
600
500
500
400
500
300
150

3,700

3,300

5,900

Interest rate

Borrowing date(upper row)
Maturity date(lower row)

0.42346%(fixed)Mar. 12, 2019
Mar. 12, 2023

0.49096%(fixed)Mar. 12, 2019
Mar. 12, 2024

0.36200%(fixed)Repayment
Description
methodSep. 3, 2019
Sep. 3, 2023

Lump-sum Unsecured
repayment
Nonat maturity guaranteed
4,300

4,800

0.32923%(fixed)0.36978%(fixed)Mar. 12, 2020
Sep. 12, 2024

Mar. 12, 2021
Mar. 12, 2025

Term

Long-term borrowings

Term

Long-term borrowings

Status of Lenders (as of September 5, 2022)
LenderMizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Aozora Bank
The Nishi-Nippon City Bank
Kansai Mirai Bank
Chiba Bank
Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Aozora Bank
Mizuho Bank
Sumitomo Mitsui Banking
Development Bank of Japan
Mizuho Trust & Banking
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Mizuho Bank
Sumitomo Mitsui Banking
Mizuho Trust & Banking
Sumitomo Mitsui Trust Bank
Shinsei Bank
Resona Bank
Total

Interest rate

Borrowing date(upper row)
Maturity date(lower row)

6,200

0.35542%(fixed)Sep. 2, 2021
Sep. 2, 2026

4,300

0.38044%(fixed)Oct. 1, 2021
Apr. 1, 2026

5,600

0.77500%(fixed)Mar. 14, 2022
Mar. 14, 2028

5,900

0.79285%(fixed)Sep. 5, 2022
Mar. 5, 2027

Borrowing amount(million yen)
750
700
700
200
500
500
400
1,500
500
300
150
1,100
900
700
300
300
300
200
500
1,574
1,084
929
593
542
439
439
2,250
1,500
620
550
490
490
50,200

Repayment
Description
methodLump-sum Unsecured
repayment
Nonat maturity guaranteed*If the maturity date is not a business day, it will be the following business day.

6,200

0.29655%(fixed)Sep. 2, 2021
Sep. 2, 2025

37

SANKEI REAL ESTATE Inc.

Key Performance Indicators (KPIs) for the Fiscal Period Ended August 2022 (7th FP)
6th FP

7th FP

6th FP

7th FP(ended Feb. 2022)(ended Aug. 2022)(ended Feb. 2022)(ended Aug. 2022)(against total assets)

47.5%

47.1%

Distribution per unit

(against total assets<considering unrealized
gain/loss>)

44.1%

44.0%

(against book value)

4.3%(against appraisal value)

2,979 yen

3,158 yen

Distribution yield

5.5%

6.5%

4.6%

ROE

5.5%

5.8%

4.0%

4.3%

Net assets per unit

108,814 yen

108,993 yen(against book value)

3.7%

4.0%

NAV per unit

126,247 yen

125,250 yen(against appraisal value)

3.4%

3.7%

Investment unit price (at end of period)

108,200 yen

97,200 yen(NOI yield)

4.4%

5.0%

NAV multiple

0.9x

0.8x

(NOI yield after
depreciation)

3.7%

4.3%

PBR

1.0x

0.9x

FFO

1,698 million yen 1,785 million yen

PER

18.2x

15.4x

AFFO

1,624 million yen 1,701 million yen

FFO multiple

14.9x

12.7x

(FFO)

81.9%

82.6%

(AFFO)

85.7%

86.7%

LTV

NOI yield

NOI yield after depreciation

Implied cap rate

FFO per unit

3,635 yen

3,821 yen
Payout ratio

EPS

2,978 yen

3,158 yen

*1. LTV (against total assets) = Interest-bearing liabilities / Total assets (book value)
LTV (against total assets <considering unrealized gain/loss>) = Interest-bearing liabilities / (Total assets(book value) + unrealized gain/loss)*2. NOI yield (against book value) = (Operating income from real estate leasing + Depreciation) /Book valueof real estate for lease
NOI yield (against appraisal value) = (Operating income from real estate leasing + Depreciation) /Appraisal value of real estate for lease*3. NOI yield after depreciation (against book value) = Operating income from real estate leasing / Book
value of real estate for lease
NOI yield after depreciation (against appraisal value) = Operating income from real estate leasing /Appraisal value of real estate for lease*4. Implied cap rate (NOI yield) = NOI (Annualized; current FP result x 2) / (Total fair value +Interest-bearing
liabilities – Cash and deposits + Leasehold deposits received)
Implied cap rate (NOI yield after depreciation) = NOI after depreciation (Annualized; current FP result x 2)
/ (Total fair value + Interest-bearing liabilities – Cash and deposits + Leasehold deposits received)*5. FFO = Net profit + Depreciation – Gain/loss on sales of real estate properties (including loss onretirement of non-current assets)*6. AFFO = FFO – Capital expenditure*7. FFO per unit = FFO / Total number of investment units issued and outstanding at end of period*8. EPS = Net profit / Total number of investment units issued and outstanding at end of period*9. Distribution per unit = Total distribution / Total number of investment units issued and outstandingat end of period*10. Distribution yield = Distribution per unit (Annualized; current FP result x 2) / Investment unit price(at end of period)*11. ROE (Return on equity) = Net profit (Annualized; most recent FP result x 2) / Net assets*12. NAV per unit = (Net assets + Unrealized gain/loss) / Total number of investment units issued andoutstanding at end of period*13. NAV multiple = Investment unit price (at end of period) / NAV per unit
*14. PBR (Price Book-value Ratio) = Investment unit price (at end of period) / Net assets per unit
*15. PER (Price Earnings Ratio) = Investment unit price (at end of period) / EPS (Annualized; most recent
FP result x 2)
*16. FFO multiple = Investment unit price / FFO per unit (Annualized; most recent FP result x 2)
*17. Payout ratio (FFO) = Total distribution / FFO*18. Payout ratio (AFFO) = Total distribution / AFFO
*19. Figures are rounded down to the indicated digits (Percentages and multiples are rounded to one
decimal place.)38

SANKEI REAL ESTATE Inc.

Statement of Income from Leasing by Property for the Fiscal Period Ended August 2022 (7th FP)(Unit: thousand yen)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

A-7

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Tokyo
Sankei Building

BREEZÉ TOWER

S-GATENIHONBASHIHONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

ToyoPark Building

Leasing business revenue

57,680553,262

161,537

68,922

198,552

175,795

103,880

Rental revenue

50,060436,290

153,808

65,353

172,470

144,949

86,766

CAM revenue

2,021

86,826--

13,232

13,790

5,937

Utilities reimbursement

3,860

21,378

5,103

3,141

10,093

10,382

8,340

Parking revenue

835

7,663

2,487

384

1,617

5,181

2,760

Other rental revenue

903

1,104

137

43

1,140

1,492

75

Expenses related toleasing business

32,780226,41045,406

26,50094,87470,50540,791

Outsourcing expenses

5,926

63,109

8,385

5,845

16,75816,722

8,960

Utilities expenses

4,176

45,826

6,306

3,583

11,071

15,037

8,048

Property taxes

12,96837,604

10,904

4,875

55,88910,477

7,770

683

1,135

-

-

-

-

-

Repair expenses

3,651

10,092

932

3,830

4,464

9,970

6,783

Insurance premium

96

767

306

137

281

425

209

-

247

250

250

250

250

350

3,347

65,70718,042

7,623

5,911

17,020

8,504

1,930

1,920

278

353

248

602

165

24,900326,851

116,131

42,422

103,678

105,289

63,08828,247392,559

134,173

50,046

109,589

122,310

71,593

Property nameLand rent

Trust fee
Depreciation
Other expenses fromleasing
Operating income (loss)
from leasing business
NOI

39

SANKEI REAL ESTATE Inc.

Statement of Income from Leasing by Property for the Fiscal Period Ended August 2022 (7th FP)(Unit: thousand yen)
Property number

A-8

A-9

A-10

A-11

A-12

B-1

B-2

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Property nameShinagawa Seaside
TS Tower

Omori
Park Building

S-GATE AKASAKA

Miyazakidai Garden
OfficeHitachi Kyusyu
Building

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima

Total

Leasing business revenue

165,506

77,148206,955

118,800

3,028,051

Rental revenue

135,838

63,487

206,955

118,800

2,381,126

CAM revenue

10,037

3,587

-

-

135,432

Utilities reimbursement

13,508

7,192

-

-

121,659

Parking revenue

5,310

1,542

-

-

33,939--355,894

55,053

43,465

1,076,927

Other rental revenue
Expenses related toleasing business

813

(Not
disclosed)*

73,348

1,338(Not
disclosed)

38,756(Not
disclosed)

Outsourcing expenses

14,379

8,573

1,200

1,400

202,506

Utilities expenses

21,844

8,005

-

-

184,674

Property taxes

16,674

6,424

26,304

15,545

303,718

-

-

-

-

1,818

Repair expenses

3,526

4,763

-

200

55,230Insurance premium

395

189

490

446

5,749

Trust fee

350

350

250

250

3,787

26,77025,572309,823

38

51

9,616

Land rent

Depreciation
Other expenses fromleasing
Operating income (loss)
from leasing business
NOI

66,786

15,915

10,428261

10,05928,134390

544,405

92,15878,68538,391

187,884

151,901

75,334

1,951,124

611,191

108,074

89,11348,451

216,018

178,671

100,906

2,260,947* The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not beenobtained from the tenant, relevant party, etc. or information from which confidential information can be derived.

40

SANKEI REAL ESTATE Inc.

Overview of Appraisal Value (as of August 31, 2022)(Unit: million yen)
Property
number

Property nameAcquisition
price

End of 7th FP
Book value (a)End of 6th FP

End of 7th FP(February 28, 2022) (b)(August 31, 2022) (c)Appraisal value

CR*

Appraisal value

Change from appraisal in theprevious fiscal period(c)－(b)CR

Appraisal value

CR

Unrealized
gain/loss(c)－(a)Tokyo Sankei Building(2% co-ownership interest)
BREEZÉ TOWER(45% quasi co-ownership interest in sectional
ownership of the office portion of the building, etc.)
S-GATE NIHONBASHI-HONCHO(51% co-ownership interest)

2,509

2,618

2,690

2.4%

2,690

2.3%

0

(0.1pt)71

13,10012,99917,775

3.7%

18,2253.6%

450(0.1pt)

5,225

6,698

6,671

7,490

3.3%

7,720

3.2%

230

(0.1pt)

1,048

A-4

S-GATE AKIHABARA

2,055

2,036

2,630

3.4%

2,710

3.3%

80

(0.1pt)673

A-5

Hibiya Sankei Building

5,829

6,067

6,570

2.9%

6,620

2.8%

50

(0.1pt)552

A-6

Hatchobori Sankei Building

4,959

5,007

5,510

4.1%

5,520

4.1%

10

0.0pt

512

A-7

Toyo Park Building

3,782

3,880

3,820

3.8%

3,920

3.7%

100

(0.1pt)39

A-8

Shinagawa Seaside TS Tower(50% quasi co-ownership interest in sectional
ownership of the building, etc.)

20,94021,11521,8503.6%

19,8003.3%(2,050)(0.3pt)(1,315)

A-9

Omori Park Building

5,400

5,444

5,490

3.7%

5,490

3.7%

0

0.0pt

45

A-10

S-GATE AKASAKA(80% quasi co-ownership interest in sectional
ownership of the building, etc.)

5,600

5,642

5,688

3.2%

5,992

3.1%

304

(0.1pt)349

A-11

Miyazakidai Garden Office

2,800

2,844

2,790

4.5%

2,790

4.5%

0

0.0pt

(54)

A-12

Hitachi Kyusyu Building

10,00010,193

10,300

4.3%

10,300

4.3%

0

0.0pt

106

83,67484,52092,603

A-1
A-2
A-3

Office buildings subtotal (total of 12 properties)-

91,777

-

(826)

-

7,256

B-1

Hotel Intergate Tokyo Kyobashi

8,961

8,924

9,020

3.8%

9,040

3.8%

20

0.0pt

115

B-2

Hotel Intergate Hiroshima

3,990

3,898

4,090

4.6%

4,120

4.6%

30

0.0pt

221

Sub assets subtotal (total of 2 properties)

12,951

12,822

13,110-13,160

-

50

-

337

Portfolio total (total of 14 properties)

96,62597,343

105,713-

104,937

-

(776)

-

7,593

* CR is a cap rate based on direct capitalization method (NCF basis).

41

SANKEI REAL ESTATE Inc.

Change in NAV per Unit (after Deduction of Distribution)
Average annual growthrate of +4.1%(Unit: yen)

123,491

121,641

122,507

19,227

20,114

123,268

122,093

17,433

16,257

105,835

105,836

End of February2022(6th FP)End of August2022(7th FP)

120,000

114,157
21,078108,184

110,000

11,744

11,670
Unrealized
gain

100,000

Capitalincreasethroughpublicoffering
Capitalincreasethroughpublicoffering

90,000102,413

102,413

102,413102,393

End of February
2020(2nd FP)End of August
2020(3rd FP)End of February
2021(4th FP)End of August2021(5th FP)

96,515～～

Net assets

80,000End of August
2019(1st FP)42SANKEI REAL ESTATE Inc.

Portfolio List (1) (as of August 31, 2022)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

A-7

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Property nameTokyo
Sankei Building

BREEZÉ TOWER

S-GATENIHONBASHI-HONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

ToyoPark Building(2% co-ownershipinterest)(45% quasi co-ownershipinterest in sectional ownershipof the office portion of thebuilding, etc.)(51% co-ownershipinterest)

Chiyoda-ku, Tokyo

Kita-ku, Osaka-shi

Chuo-ku, Tokyo

Chiyoda-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Koto-ku, Tokyo

Acquisition dateMar. 12, 2019(1) Mar. 12, 2019(2) Sep. 3, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Acquisition price

2,509 million yen

13,100 million yen

6,698 million yen

2,055 million yen

5,829 million yen

4,959 million yen

3,782 million yen

Appraisal value

2,690 million yen

18,225 million yen

7,720 million yen

2,710 million yen

6,620 million yen

5,520 million yen

3,920 million yen

Appraisal NOI yield(Appraisal NOI/Acquisition
price)

2.6%

5.5%

3.8%

4.4%

3.5%

5.1%

4.0%

Construction completion

Sep. 2000

Jul. 2008

Oct. 2018

Sep. 2017

Jun. 1992

Sep. 1965

Jun. 1991

Occupancy rate

99.5%

96.3%

100.0%

100.0%

100.0%

100.0%

92.3%

PML value

2.3%

2.8%

2.0%

2.2%

3.1%

0.3%

9.0%

Location43

SANKEI REAL ESTATE Inc.

Portfolio List (2) (as of August 31, 2022)
Property number

A-8

A-9

A-10

A-11

A-12

B-1

B-2

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Property nameShinagawa Seaside
TS Tower

Omori
Park Building

S-GATEAKASAKA

Miyazakidai
Garden OfficeHitachi Kyusyu
Building

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima(50% quasi co-ownershipinterest in sectional ownershipof the building, etc.)(80% quasi co-ownershipinterest)

Shinagawa-ku, Tokyo

Ota-ku, Tokyo

Minato-ku, Tokyo

Miyamae-ku,
Kawasaki-shi

Sawara-ku,
Fukuoka-shi

Chuo-ku, Tokyo

Naka-ku,
Hiroshima-shi

Acquisition date(1) Sep. 3, 2019(2) Sep. 2, 2021

Sep. 3, 2019(1) Oct. 1, 2020
(2) Sep. 2, 2021

Sep. 2, 2021

Sep. 2, 2021

Mar. 12, 2019

Sep. 3, 2019

Acquisition price

20,940 million yen

5,400 million yen

5,600 million yen

2,800 million yen

10,000 million yen

8,961 million yen

3,990 million yen

Appraisal value

19,800 million yen

5,490 million yen

5,992 million yen

2,790 million yen

10,300 million yen

9,040 million yen

4,120 million yen

Appraisal NOI yield(Appraisal NOI/Acquisition
price)

3.5%

4.0%

3.4%

4.6%

4.8%

3.9%

5.0%

Construction completion

Jul. 2003

May 1993

Jul. 2015

Feb. 1993

Feb. 1996

Jan. 2018

Oct. 2018

Occupancy rate

66.3%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%PML value

3.2%

5.6%

4.6%

9.5%

2.5%

1.8%

2.1%

Location

PML value (average)

1.5%

44

SANKEI REAL ESTATE Inc.

Portfolio Matrix (1) (as of August 31, 2022)<Cap. Rate (Appraisal NOI Yield) x Area>

Area(Unit: million yen)

Area
Appraisal
NOI
CAP

Central 3 wards of Tokyo

Tokyo 23 wards

Greater Tokyo(Chiyoda, Chuo, and Minato wards)(Other than the central 3 wards of Tokyo)

Property name

Property name

Building age, walking
time from station

Acquisition price

Acquisition price

Other ordinance-designated cities(Excluding Tokyo)

Nagoya City

Core Cities, Major Regional Cities

Property name

Property name

Building age, walking
time from station

Acquisition price

Building age, walking
time from station

21 years old,
1-minute walk

Building age, walking
time from station

Acquisition price

2,509
2,509

(2.6%)S-GATE AKASAKA

Less than
3.5%

7 years old,
1-minute walk

5,600
5,600

Hibiya Sankei Building
30 years old,
1-minute walk

5,829

(5.8%)

Shinagawa Seaside TS Tower
19 years old,
1-minute walk

20,940S-GATE NIHONBASHI-HONCHO

Less than
4.0%

3 years old,
4-minute walk

Total acquisition
price(Overall ratio)

Property nameAcquisition priceTokyo Sankei Building

Less than
3.0%

Cap. Rate

Building age, walking
time from station

Osaka City

42,4296,698(43.9%)

Hotel Intergate Tokyo Kyobashi
4 years old,
1-minute walk

8,961

S-GATE AKIHABARA
4 years old,
5-minute walkLess than
4.5%

Omori Park Building
2,055

29 years old,
3-minute walk

5,400

11,237

Toyo Park Building
31 years old,
9-minute walk

(11.6%)

3,782

Miyazakidai Garden OfficeLess than
5.0%

29 years old,
3-minute walk

2,800

Hatchobori Sankei Building

5.0%
or more56 years old,
3-minute walk

BREEZÉ TOWER
14 years old,
3-minute walk

4,959

13,100

Hitachi Kyusyu building

12,80026 years old,
17-minute walk

10,000(13.2%)

Hotel Intergate Hiroshima

22,0493 years old,
3-minute walk

3,990

(22.8%)

Total acquisition
price36,61330,1222,800

13,10013,99096,625(Overall ratio)(37.9%)(31.2%)(2.9%)(13.6%)(14.5%)(100.0%)

Typical Floorplate * Office Buildings Only
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than
100 tsubos

45

SANKEI REAL ESTATE Inc.

Portfolio Matrix (2) (as of August 31, 2022)< Typical Floorplate x Area>

Area(Unit: million yen)

Area
Typicalfloorplate(tsubo)Greater Tokyo(Chiyoda, Chuo, and Minato wards)(Other than the central 3 wards of Tokyo)

Property name

Property name

Building age, walking
time from station

Acquisition priceTokyo Sankei Building

400 tsubos
or moreTypical floorplate (tsubo)

Central 3 wards of Tokyo

Tokyo 23 wards

21 years old,
1-minute walkLess than
400 tsubos
300 tsubos
or moreLess than
300 tsubos
200 tsubos
or moreBuilding age, walking
time from station

Acquisition price

Other ordinance-designated cities(Excluding Tokyo)

Nagoya City

Core Cities, Major Regional Cities

Property name

Property name

Building age, walking
time from station

Acquisition price

Building age, walking
time from station

19 years old,
1-minute walk

20,940Omori Park Building
29 years old,
3-minute walk

Hatchobori Sankei Building
4,959

14 years old,
3-minute walkMiyazakidai Garden Office
5,400

29 years old,
3-minute walk

2,800

Toyo Park Building
31 years old,
9-minute walk

Building age, walking
time from station

Acquisition price

36,54913,100(37.8%)

Hitachi Kyusyu building

18,20026 years old,
17-minute walk

10,000(18.8%)

Hotel Intergate Hiroshima

12,732

3 years old,
3-minute walk

3,782

Total acquisition
price(Overall ratio)

Property nameAcquisition price

BREEZÉ TOWER

Shinagawa Seaside TS Tower
2,509

56 years old,
3-minute walkOsaka City

3,990

(13.2%)S-GATE NIHONBASHI-HONCHO
3 years old,
4-minute walk

6,698

Hibiya Sankei Building
Less than
200 tsubos
100 tsubos
or more30 years old,
1-minute walk

5,829

27,089S-GATE AKASAKA
7 years old,
1-minute walk

(28.0%)

5,600

Hotel Intergate Tokyo Kyobashi
4 years old,
1-minute walk

8,961

S-GATE AKIHABARA

Less than
100 tsubos

4 years old,
5-minute walk

2,055
2,055

(2.1%)

Total acquisition
price36,61330,1222,800

13,10013,99096,625(Overall ratio)(37.9%)(31.2%)(2.9%)(13.6%)(14.5%)(100.0%)

Typical Floorplate * Office Buildings Only (Construction area is used as reference value for hotels)
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than
100 tsubos

46

SANKEI REAL ESTATE Inc.

Portfolio Status (as of August 31, 2022)
SANKEI REAL ESTATE’s high-quality portfolio is supported by strong sponsor support

Sponsor support rate 100%
Close
Percentage by Walking Time to the Nearest Station

More than
5 minutes
14.3%
More than
3 minutes,
but within
5 minutes
Average
9.1%

Less than
100 tsubos
100 tsubos
2.5%
or more,but less than
200 tsubos

Within
10 years
28.3%

21.7%

19.2
years

27.5%

Average

10.4%

Within 10 years

45%

Within 3 minutes

77%

Within 5 minutes

86%
0%

20%

40%

60%

80%

100%

43.7%

300 tsubos or more,
but less than 400 tsubos

21.8%

21.7%
Within 1 minute

400 tsubos
or more320.4
tsubos

200 tsubos
or more,but less than
300 tsubos

More than
10 years,
but within
15 yearsMore than 15 years, 13.6%
but within 20 years

More than 1 minute,but within 3 minutes
31.3%

Large
Percentage by Typical Floorplate (Office Buildings)

Percentage by Building Age

More than
30 years
9.0%
More than
20 years,
but within
30 years
Average

Within
1 minute
45.4%

3.9
minutesNew

28%

Within 15 years

Large-scale buildings*

42%

Within 20 years

63%

Within 30 years

Large buildings

91%
0%

20%

40%

60%

80%

76%
98%

0%

20%

40%

60%

80% 100%

100%* Calculated based on the definition of “Large-scale buildings: 200 tsubos or more” and “Large buildings: 100 tsubos or more, but less than 200 tsubos” made by Sanko Estate Co., Ltd.

47

SANKEI REAL ESTATE Inc.

Status of Lease Agreements (as of August 31, 2022; based on leased area after considering ownership interest)
Percentage by Lease Period

Percentage by Lease Period

Percentage by Contract Form

(excluding hotels)(including hotels)

10 years or more
Fixed-term building
lease agreement

Less than 3 years

10 years or more

31.6%

Average*1

Average*1

47.9%

52.1%

Less than 3 years

19.8%

26.7%

4.0 years 47.6%

6.4 years
13.3%

5 years or more, butless than 10 years

40.2%
Ordinary building
lease agreement

3 years or more, butless than 5 years(Manufacturing)

Others 3.8%
Precision devices 1.7%
Machinery 2.1%
Game 2.2%
Materials 2.2%

IT 4.2%Service Toyo Sangyo
 Yokogawa Solution Service
 NEC Facilities, etc.

53.0%

Food
 NH Foods, etc.

Manufacturing
Hotel
 GRANVISTA Hotels & Resorts(100% subsidiary of sponsor)

15.5%

Others 1.8%

Pharmaceuticals
 Bayer Yakuhin, etc. 9.0%

4.8%

12.8%

5 years or more, butless than 10 years

Percentage by Business Type

Wholesale & retail 3.4%

Construction & real estate

15.7%

3 years or more, butless than 5 years

Percentage by Business TypeTransportation & communications 2.4%

5.1%

10.0%

70.9%

General electrical appliance manufacturers
and electronics manufacturers
 Hitachi
 Sony Group, etc.

48

SANKEI REAL ESTATE Inc.

Top End Tenants by Leased Area (as of August 31, 2022)

Business type

Total leased
area
(m²)

% of
portfolio’s
total leased
area

Manufacturing(general electricalappliances)

26,513.3

27.61%

Hitachi Kyusyu Building

Hotels15,166.7

15.79%

Hotel Intergate Tokyo Kyobashi
Hotel Intergate Hiroshima

Sony Group Corporation

Manufacturing(general electricalappliances)Not
disclosed

Not
disclosed

Shinagawa Seaside TS Tower

NH Foods Ltd.

Manufacturing(food)

Not
disclosed

Not
disclosed

BREEZÉ TOWER

Bayer Yakuhin, Ltd.

Manufacturing(pharmaceutical)

Not
disclosed

Not
disclosed

BREEZÉ TOWER

Konoike Construction Co., Ltd.

Construction

2,542.7

2.65%

S-GATE NIHONBASHI-HONCHO

Hakuhodo DY Holdings Inc.

Services(advertising)

2,517.7

2.62%

S-GATE AKASAKA

Toyo Sangyo Co., Ltd.

Services(equipment maintenance)

1,509.7

1.57%

Omori Park Building

Yokogawa Solution Service Corporation

Services(equipment maintenance)Not
disclosed

Not
disclosed

BREEZÉ TOWER

Retail (food)

1,159.7

1.21%

Miyazakidai Garden Office

Name of end tenant

Hitachi, Ltd.
GRANVISTA Hotels & Resorts Co., Ltd.

Ryochi Keiei

Property name

*1 The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, relevant party,
etc. or information from which confidential information can be derived.
*2 An agreement was reached with Sony Group Corporation for the termination of contracts for Shinagawa Seaside TS Tower on March 31, 2023 (14 floors).
*3 “Total leased area” is rounded to one decimal place.

49

SANKEI REAL ESTATE Inc.

Status of Unitholders (as of August 31, 2022)
 Breakdown of Investment Units by Unitholder Type
Financial institutions
Other Japanese corporations
Individuals/Other

16.88%

13.22%

13.93%

14.31%

14.68%

16.07%

24.48%

80%

11.66%

70%

6.75%
1.49%

15.62%

14.24%

14.52%

15.63%

18.23%
6.25%
1.24%

5.53%
1.14%

4.52%
1.22%

Number ofunits owned(units)Share of units
owned
(%)

Custody Bank of Japan, Ltd. (Trust Account)

112,663

24.11%The Master Trust Bank of Japan, Ltd. (Trust Account)

67,82014.51%The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)

20,288

4.34%

The Sankei Building Co., Ltd.

17,4793.74%

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

7,008

1.50%

The Bank of Yokohama, Ltd.

6,107

1.30%

JAPAN SECURITIES FINANCE CO., LTD.

5,247

1.12%

SSBTC CLIENT OMNIBUS ACCOUNT

4,066

0.87%

JP MORGAN CHASE BANK 385771

3,912

0.83%

Mizuho Securities Co., Ltd.

3,729

0.79%

248,319

53.16%Name of unitholder

100%
90%

 Major Unitholders

Securities companies
Non-Japanese corporations, etc.

11.10%

5.96%
2.57%

5.94%
2.00%

60%

6.87%
4.38%

50%
40%
63.19%

30%

64.48%

63.92%

64.31%

62.61%

57.74%

53.15%

20%
10%0%
End of 1st FP End of 2nd FP End of 3rd FP End of 4th FP End of 5th FP End of 6th FP End of 7th FP

 Number of Unitholders by Unitholder TypeEnd of
1st FP

End of
2nd FP

End of
3rd FP

End of
4th FP

End of
5th FP

End of
6th FP

End of
7th FP

37

55

54

49

43

50

50

17

19

23

22

22

23

23

116

127

131

135

124

178

240

57

62

59

70

75

143

160

Individuals/Other

6,399

7,585

7,458

7,406

7,064

10,117

13,872

Total

6,626

7,848

7,725

7,682

7,328

10,511

14,345

Financial
institutions
Securities
companies
Other Japanese
corporations
Non-Japanese
corporations, etc.

Total
* Each share above is rounded down to two decimal place.

50

SANKEI REAL ESTATE Inc.

Profile of the Asset Management Company
Trade name

Sankei Building Asset Management Co., Ltd.

Established

April 13, 2018

CapitalShareholder composition
Main line of businessDirectors and auditors

5 directors
1 auditor

100 million yen

Financial instruments
business registration

Director-General of the Kanto Local Finance Bureau Registration(FIBO) No. 3094

The Sankei Building Co., Ltd. 100%

Real estate brokerage
licenseGovernor of Tokyo License (1) No. 102209

Investment management business, investment advisory andagency business, type II financial instruments business

Discretionary transaction
agency, etc. approval

Minister of Land, Infrastructure, Transport and Tourism ApprovalNo. 125

General Meeting of Shareholders
AuditorBoard of Directors
Investment Committee

Compliance Committee
President and CEO

Internal Audit OfficeCompliance OfficeSustainability Promotion Office

Investment Management Department
SANKEI REAL ESTATE Inc.
・Investment policy planning・Acquisition and sale of assets undermanagement
・Operation and management ofassets under management

Finance & IR Department

・Corporate planning, accounting
and general affairs
・Financials and IR

Fund Management Department
Private equity real estate funds, etc.
・Investment policy planning・Acquisition and sale of assets
under management
・Operation and management ofassets under management

51

SANKEI REAL ESTATE Inc.

Notes
Unless otherwise specified, the figures in this document are rounded down to the nearest unit and percentages are rounded to one decimal place. Therefore, the value, such as sum total, may not match the value obtained thereby.
Page 3
1. “Portfolio matrix” is the balance and distribution of areas and yield, etc. in the overall assets acquired by SANKEI REAL ESTATE. The same applies below.
2. “TCFD” refers to the “Task Force on Climate-Related Financial Disclosures” established by the Financial Stability Board at the request of G20 to consider how to perform climate-related disclosure and responses by financial
institutions.
3. Sankei Building Asset Management has concluded a sponsor support agreement with the sponsor (Sankei Building) for receiving support providing sale information on properties and various other types of support.
Page 5
1. “Distributions in excess of earnings” were 7,136,000 yen as a refund of contribution that falls under distribution through the reduction in unitholders’ capital for tax purposes and excess of earnings per unit were 20 yen due to adecrease in net profit resulting from the recording of temporary borrowing-related expenses associated with the implementation of borrowing for the acquisition of real estate trust beneficiary rights of 4 properties on September
2, 2021. This distributions in excess of earnings is based on the policy on cash distribution in excess of earnings specified in Article 36, Paragraph 2 of the articles of incorporation of SANKEI REAL ESTATE.
Page 9
1. Shinagawa Seaside TS Tower holds a 50% quasi co-ownership interest in sectional ownership of the building, etc.
Page 10
1. “DBJ Green Building certification” is a certification system established by Development Bank of Japan Inc. (DBJ) in April 2011 to support properties that give proper care to the environment and society (Green Building). Besides theapplicable properties’ environmental performance, based on comprehensive evaluation, including various efforts for stakeholders, such as consideration to disaster prevention or local communities, it evaluates and certifies realestate needed for society and economy and supports those initiatives.
Page 14■ Change in Occupancy Rate
1. “Occupancy rate” indicates the percentage of the total leased area (*2) against the total leasable area (*1) of each of the acquired assets as of each base date, rounded to one decimal place.
(*1) “Total leasable area” is the total area believed to be leasable (not including area for storage facilities, billboards, parking areas, etc.) based on lease agreements or building drawings, etc. pertaining to each of the acquired assets asof each date shown.
(*2) “Total leased area” is the total leased area (not including area for storage facilities, billboards, parking areas, etc.) shown in lease agreements for the building pertaining to each of the acquired assets as of each date shown(excluding, however, lease agreements for which the lease period has not commenced). For the portion covered by a pass-through master lease, this is the total of the area for which a lease agreement has actually been concluded
with an end tenant for said portion, and the lease period has commenced.
■ Change in Portfolio’s Actual NOI Yield and Office Buildings Average Rent Unit Price
1. Office Buildings Average Rent is calculated using “Rental and CAM revenue upon the most recent settlement / 6 months / Leasable area x Occupancy rate.”
Page 15■ (Top graph) Rent Revision Performance of Office Buildings (Based on Rental Area)
1. Of the assets acquired by Sankei Real Estate as of the end of each fiscal period, applies to properties classified under “Office Buildings” (12 properties in the fiscal period ended August 2022: Tokyo Sankei Building (2% co-ownershipinterest), BREEZÉ TOWER (45% quasi co-ownership interest in sectional ownership of the office portion of the building), S-GATE NIHONBASHI-HONCHO (51% co-ownership interest), S-GATE AKIHABARA, Hibiya Sankei Building,
Hatchobori Sankei Building, Toyo Park Building, Shinagawa Seaside TS Tower (50% quasi co-ownership interest in sectional ownership of the building, etc.), Omori Park Building, S-GATE AKASAKA (80% quasi co-ownership interest),
Miyazakidai Garden Office, and Hitachi Kyusyu Building). For example, for the fiscal period ended August 2022, in the 12 applicable properties, those with rent revision under lease agreements occurring in the period from March 1,
2022, until August 31, 2022 (limited to those for which a lease agreement was concluded or renewed during the relevant period) applied to 17 tenants with a total of 705 tsubos in area (rounded to the nearest unit). Assuming therevised area is 100%, on a leased area basis, monthly rent was increased in 0%, renewed at the same level (maintained) in 81.3%, and reduced in 18.7% (*).
(*) Changes in floor space were treated as being maintained if there was no change in the current rent per unit.
2. “Rate of increase” refers to the figure calculated by dividing the difference between the total monthly rent after renewal and the total monthly rent before renewal by the total monthly rent before renewal for lease agreements
renewed during each period (for example, from March 1, 2022 to August 31, 2022 for the period ended August 2022), with increased rent (calculated for renewal with rent revision/renewal of agreements with existing tenants;
limited to lease agreements concluded or renewed during the relevant period).
Page 17■ (Top graph) Scheduled renewal with rent revision/renewal and progress (targeting office buildings)
1. Applies to lease agreements concluded in the period from March 1, 2022, to August 31, 2022, stating the area subject to renewal with rent revision/renewal in the fiscal period ending February 2023 (8th FP) and the fiscal period
ending August 2023 (9th FP). The percentage of total leased area after acquisition is shown.
2. The leased area of the office buildings subject to “contract revision/renewal planned area” is the figure corresponding to the ownership interest acquired by SANKEI REAL ESTATE in each property.
3. “Ratio to total leased area” is the value calculated by dividing the total contract revision/renewal (planned) area for each contract revision/ renewal period by the total leased area for each period.
4. “Progress rate” is the value calculated by dividing the total leased area for lease contracts that have been concluded as of August 31, 2022, and whose revision/renewal has been completed by the contract revision/renewal(planned) area for each contract revision/renewal period.
■ (Bottom graph) Change in rent gap for office buildings
1. “Rent Gap” refers to the figure arrived at when the amount of difference between the average rent for SANKEI REAL ESTATE’s office building portfolio (*1) and the market rent (*2) is divided by the market rent. SANKEI REAL ESTATE
believes there is room for negotiation with tenants to increase rent when revising rent if this figure is negative. This applies to the assets acquired by SANKEI REAL ESTATE as of the end of each fiscal period that are categorized as“Office Buildings.”

52

SANKEI REAL ESTATE Inc.

Notes(*1) “Average rent of the office building portfolio” is calculated using the weighted average, based on leased area, of the total amount of monthly rent specified in lease agreements concluded as of the end of each period, for the officebuilding portfolio* (Including CAM. Furthermore, it does not take into consideration free rent and rent holidays as of the same day and is based on the rent as of the end of each period, if there is an agreement to change rent in
the future. Furthermore, if agreements with tenants include variable rent, calculation is made without taking into consideration variable rent. Consumption tax, etc. is not included).
(*2) “Market rent” is calculated using the weighted average, based on leased area, of the total median value of assumed new contract rent (typical floorplate) (including CAM) as of September 2022 for office buildings subject to rent
gap calculation within the acquired assets of SANKEI REAL ESTATE shown in the market report prepared by CBRE.
Market rent is assessed by CBRE using its own methodology assuming the conclusion of new contracts with new tenants as of September 2022 based on information collected by CBRE, and the objectivity of the assessment, and thevalidity and accuracy of the assessment content are not guaranteed. In particular, actual new contract rent fluctuates due to factors such as whether it is a new tenant or a rent revision with an existing tenant, the timing of therent revision, the timing of moving in, the contract area and the region, and for this reason the rent in the CBRE-assessed rent may not be realized. Furthermore, the amount and level of actual new contract rent for office building
portfolio are not guaranteed, and there are no assurances or promises that the rent increases equivalent to the “rent gap” will be made.
Page 22
1. “Portfolio matrix” is the balance and distribution of areas and yield, etc. in the overall assets acquired by SANKEI REAL ESTATE. The same applies below.
2. “Cap. Rate” refers to “appraisal NOI yield,” which is the ratio of the net operating income derived by the direct capitalization method shown on the real estate appraisal report against the acquisition price. The same applies below.
3. “Acquisition price” is shown as the transaction price of real estate and trust beneficiary rights shown on the transaction agreement pertaining to each of the acquired assets. The transaction prices do not include consumption taxes,
local consumption taxes or expenses required for acquisition. The same applies below.
4. “Greater Tokyo” refers to the prefectures of Tokyo, Kanagawa, Saitama and Chiba. The same applies below.
5. “Core cities” refers to cities with a population of 200,000 or more (excluding those in Greater Tokyo, Osaka City, Nagoya City and other ordinance-designated cities).
6. “Major regional cities” refer to municipalities with a population of less than 200,000 that are deemed by Sankei Building Asset Management have a certain level of demand for specific applications.
7. “Typical floorplate” is a typical floor plan in mid- to high-rise buildings. The same applies below.
8.
Tokyo Sankei Building targets 2% co-ownership interest, BREEZÉ TOWER, 45% quasi co-ownership interest in sectional ownership of the office portion of the building, etc., S-GATE NIHONBASHI-HONCHO, 51% co-ownership interest,
Shinagawa Seaside TS Tower, 50% quasi co-ownership interest in sectional ownership of the building, etc., and S-GATE AKASAKA, 80% quasi co-ownership interest.
9. “Actual NOI yield” refers to the actual NOI yield of all assets held at each point in time calculated using the following formula for assets after acquisition. The same applies below.
Actual NOI yield = Actual NOI (annualized)(*) ÷ acquisition price(*) Actual NOI states the level of normal operation(*). For example, as some fixed asset taxes on acquired assets have not been expensed in the fiscal period ended August 2019, the fiscal period ended February 2020, the fiscal
period ended February 2021, and the fiscal period ended February 2022, these are the figures after adjustment being made assuming these are expensed. For the fiscal period ended August 2022, it is the figure calculated bysubtracting other temporarily occurring revenue.
(*) “During normal operation” (also referred to as “the level of normal operation”) refers to the level at the time of stable operations rather than the temporary level immediately after commencement of operations by SANKEIREAL ESTATE. The same applies below.
10. “Investment ratio by geographic area” states the percentage in terms of acquisition price, after categorizing overall assets acquired by SANKEI REAL ESTATE by geographic area.
11. “Investment ratio by asset” states the percentage in terms of acquisition price, after categorizing overall assets acquired by SANKEI REAL ESTATE into office buildings and those other than office buildings.
Page 23
1. “BELS”, the Building-Housing Energy-efficiency Labeling System, is a third-party evaluation system that evaluates energy-saving performance of buildings based on evaluation standards set by the Ministry of Land, Infrastructure,
Transport and Tourism. The same applies below.
Page 24
1. “Office building (main asset) development properties” refers to those developed or scheduled to be developed by Sankei Building, special purpose companies or specified purpose companies in which Sankei Building invests througha silent partnership, preferred equity investment or other means, and affiliates of Sankei Building.
2. The development plans shown in the sub asset development properties are those targeted or planned by Sankei Building and its execution is neither guaranteed nor committed.
Page 27■ (Top left figure) Financing Highlights
1. “Balance of interest-bearing liabilities” shows the figure as of September 5, 2022.
2. “Ratio of long-term debt” is the ratio of the balance of the long-term interest-bearing debt (not including the current portion) included in the balance of interest-bearing liabilities as of September 5, 2022.
3. “Average financing interest rate” is calculated using the weighted average, based the balance of interest-bearing debt, of the anticipated applicable interest rate of each interest-bearing liability as of September 5, 2022. Calculations
are on an interest payable basis and do not include arrangement fee and other borrowing related expenses.
4. “LTV” is the balance of interest-bearing liabilities divided by the amount of total assets and multiplied by 100, rounded to one decimal place. The figures at the end of the 8th FP and the end of the 9th FP at the bottom are forecasts.
5. “Ratio of fixed interest rate” refers to the ratio of the balance of interest-bearing liabilities with fixed interest included in the balance of interest-bearing liabilities as of September 5, 2022.
6. “Average remaining time to maturity” refers to the period determined by the weighted average, based on the balance of each interest-bearing liability, of the period until the repayment date or redemption date of each interestbearing liability on September 5, 2022.
■ (Middle left figure) Distribution map of average financing interest rates and average remaining time to maturity of office J-REITs
1. “J-REIT” refers to a listed real estate investment corporation, and “Office J-REITs” refer to J-REITs with an office buildings rate (*) exceeding 50% in the portfolio of each investment corporation at the end of the most recent fiscal
period as of September 30, 2022.
(*) “Office buildings rate” is the percentage (on acquisition price basis) of “office buildings” included in an investment corporation’s entire portfolio. The same applies below.
2. Uses the figures for the most recent fiscal period of “Office J-REITs” as of September 30, 2022.
3. The dotted lines in the graphs are straight lines approximating the relationships between “average financing interest rate” and “average remaining time to maturity” for Office J-REITs that are statistically calculated to minimize thesum of the error (distance between the anticipated line and the coordinates of the distribution) using the least-squares method53

SANKEI REAL ESTATE Inc.

Notes
Page 28
1. “AIFMD Article 8 (SFDR)” refers to one of the specific measures in the “clarifying institutional investors and asset managers duties” which is one of the ten actions in the “Action Plan: Financing Sustainable Growth” published in the
EU by the European Commission in 2018.
■ (Bottom figure) Maturity ladder
1. “Maturity ladder” refers to a diagram that aggregates the amounts of each interest-bearing liability for a certain period by maturity date and lists these in order of time.
Page 31
1. “GRESB” is the name of an annual benchmark assessment measuring consideration for the environment, society and governance (ESG) in real estate companies and funds, and the organization that manages this. It was founded in2009 by a group of major European pension funds leading the Principles for Responsible Investment (PRI). There are currently 140 investor members utilizing GRESB data in the selection of investment targets and dialogue withinvestment targets, and several institutions in Japan, including the Government Pension Investment Fund (GPIF) use GRESB assessment results. 1,520 listed and unlisted real estate companies and funds participated in the 2021
GRESB Real Estate Assessment assessing real estate companies and funds.
Page 32■ Environment
1. “DBJ Green Building Certification” was obtained by The Sankei Building Co., Ltd. for Tokyo Sankei Building and BREEZÉ TOWER
Page 42
1. The actual values of NAV per unit in each period are calculated as follows.
Actual value of NAV per unit = Net assets per unit (*1) at end of each FP + Unrealized gain (loss) at end of each FP (*2) / Number of investment units issued and outstanding at end of each FP (*3)(*1) “Net assets per unit” is obtained using the following formula. This is simply shown as “Net assets” in the graph. The same applies below.
Net assets per unit = Net assets at end of FP (after deducting distributions at the end of each FP) ÷ Number of investment units issued and outstanding at end of FP(*2) “Unrealized gain/loss at end of FP” is obtained using the following equation. It is referred to as “unrealized gain” if the result is positive and “unrealized loss” if negative. This is simply shown as “Unrealized gain” or“Unrealized loss” in the graph.
Unrealized gain/loss at end of FP = Total appraisal value of assets held by SANKEI REAL ESTATE at end of FP - Total book value of assets held by SANKEI REAL ESTATE at end of FP(*3) “Number of investment units issued and outstanding at end of each FP” is the number of investment units issued and outstanding at the end of each fiscal period.
2. Average annual growth rate is shown as the annualized value of the rate of increase from the NAV per unit of 108,184 yen for the fiscal period ended August 31, 2019 (1st FP) to the NAV per unit of 122,093 yen for the fiscal period
ended August 31, 2022 (7th FP).
3. The figures shown on this page are rounded to the nearest unit and percentages are rounded to one decimal place.
Pages 43 and 44
1. Entries with multiple “acquisition dates” indicate additional acquisitions of interest.
2. “PML value” refers to the probable maximum loss ratio in earthquake risk analysis, which is represented by the percentage of the probable maximum loss in relation to the replacement cost (value in the event of reconstructing thebuilding) in the event of the largest anticipated earthquake during the period of use of the building), PML = probable maximum loss / replacement cost x 100).
Page 47
1. “Sponsor support rate” is the percentage (on an acquisition price basis) of sponsor-owned properties or those acquired by using sales information on properties owned by third parties provided based on a sponsor support
agreement. The same applies below.
2. “Percentage by Walking Time to the Nearest Station” is the percentage, based on acquisition price, of assets held after classifying them by the number of minutes required to walk from the nearest station assuming that it takes one
minute to travel a road distance of 80 meters, and the average is the weighted average based on acquisition price of each property of the calculated figures, rounded to one decimal place.
3. “Percentage by Building Age” is the percentage, based on acquisition price, of assets held after classifying them by building age as of August 31, 2022, and the average is the weighted average, based on acquisition price of each
property, of the calculated figures, rounded to one decimal place.
4. “Percentage by Typical Floorplate (Office Buildings)” is the percentage, based on acquisition price, of assets held of which use is office buildings after classifying them by typical floorplate, and the average is the weighted average,
based on acquisition price of each property, of the calculated figures, rounded to one decimal place
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1. “Percentage by Contract Form” is the percentage of assets held based on leased area, rounded to one decimal place.
2. “Percentage by Lease Period” is the percentage of assets held classified into “including hotels” and “excluding hotels,” based on leased area, rounded to one decimal place. The average is the weighted average based on leased areaof each property of the calculated figures, rounded to one decimal place.
3. “Percentage by Business Type” is the percentage of assets held classified by tenant business type based on leased area, rounded to one decimal place.
4. “Percentage by Business Type (Manufacturing)” is the percentage of assets held classified by tenant business type within manufacturing based on leased area, rounded to one decimal place.
5. The leased area for properties leased through a master lessee is calculated using the areas stated in the lease agreements concluded with end tenants as the areas leased to the end tenants
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1. “Total leased area” and “% of portfolio’s total leased area” are based on figures after considering SANKEI REAL ESTATE’s ownership interest.
2. “% of portfolio’s total leased area” refers to the total leased area expressed as a percentage of the entire portfolio’s total leased area, rounded to one decimal place.
3. “Total leased area” and “% of portfolio’s total leased area” for properties leased through a master lessee are calculated using the areas stated in the lease agreements concluded with end tenants as the areas leased to the end
tenants

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